Existence and uniqueness of equilibrium in nonoptimal unbounded infinite horizon economies

Olivier F. Morand, Kevin Reffett

Research output: Contribution to journalArticlepeer-review

14 Scopus citations


In applied work in macroeconomics and finance, nonoptimal infinite horizon economies are often studied in which the state-space is unbounded. Important examples of such economies are single-sector growth models with production externalities, valued fiat money, monopolistic competition, and/or distortionary government taxation. Although sufficient conditions for existence and uniqueness of Markovian equilibrium are well known for the compact state space case, no similar sufficient conditions exist for unbounded growth. This paper provides such a set of sufficient conditions, and presents a computational algorithm that will prove asymptotically consistent when computing Markovian equilibrium.

Original languageEnglish (US)
Pages (from-to)1351-1373
Number of pages23
JournalJournal of Monetary Economics
Issue number6
StatePublished - Sep 2003


  • Dynamic models
  • Equilibrium
  • Nonoptimal
  • Unbounded

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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